Dynamic choice models of strategic customer behavior for dynamic pricing in continuous time

In this talk, we examine strategic behavior models where customers make their choices at the time points generated by a Poisson process and the chosen decision/action affects customer state. Given customer expectations about the future evolution of the environment, this approach provides a straightforward model of the customer utilities in each state and the corresponding customer population dynamics in the context of dynamic pricing and other demand management policies. In the first application of this approach, we consider “passes” viewed as prepaid packages of multiple units of goods or services, typically with flexible delivery or consumption dates. We formulate the dynamic pricing problem for passes and individual items as an optimal control problem and find that the optimal pricing policy has a turnpike property. In the second application, we consider a control-theoretic model for oligopolistic dynamic price competition when customers are making strategic repeated purchases. In both cases the turnpike solutions reveal a number of managerial insights. This is joint work with Jue Wang and Yuri Levin.

Dr. Nediak’s current research focuses on Revenue Management and Dynamic Pricing. He is actively involved in applied research for corporate clients and was a member of a joint team from Smith School of Business, Toronto-based Pricing Solutions Ltd., and Molson Coors Canada that won the 2013 INFORMS Revenue Management and Pricing Practice Award. Dr. Nediak now serves as an Associate Director, Research of the Scotiabank Centre for Customer Analytics at Smith School of Business, Queen’s University.

This seminar will give you the opportunity to meet the speaker and all the researchers in attendance while enjoying drinks and snacks. We would highly appreciate if you could confirm your attendance.

Canadian Operational Research Society

GERAD

Mar 10, 2016 02:30 PM
–
03:30 PM

GERAD

GERAD is a multi university research center founded in 1979, financed by FRQNT.
It involves some seventy experts from a mix of disciplines: quantitative methods for management, operations researchers, computer scientists, mathematicians and mathematical engineers, from HEC Montréal, Polytechnique Montréal, McGill University and Université du Québec à Montréal.